M5 chart of EUR/USD

EUR/USD was still trading within the 1.0581-1.0658 horizontal channel. There was one more attempt to cross the upper limit of this channel, but in the end it was followed by a rebound and the pair retained the flat. Just like the previous days, there were no important fundamental or macroeconomic events in the EU and the US. So there was nothing to react to and I'm not surprised that there is a flat. I mentioned before that all we have to do now is to wait for the pair to leave this channel or trade on the lower time frames for a bounce from its limits. But those bounces are not always accurate either. I would like to remind you once again that it is not the best time to trade when facing a flat.

All of yesterday's trading signals were near 1.0658 and the critical line. Since the price managed to settle above the level by 9 pips, I added another level to this area so that the signals were clearer - 1.0669. The first two signals to sell proved to be false, in the first case, the pair went down 15 pips, so the trade closed at Stop Loss Breakeven. In the second case, the pair closed above 1.0658 so the trade closed with a small loss. All subsequent signals in this area should not be used.

COT report

The COT reports for the euro in the last few months have been fully consistent with what is happening in the market. You can clearly see on the chart that the net position of big players (the second indicator) has been growing since early September. Around the same time, the euro started to grow. At this time, the net position of the non-commercial traders has been bullish and strengthens almost every week, but it is a rather high value that allows us to assume that the upward movement will end soon. Notably, the green and red lines of the first indicator have moved far apart from each other, which often means the end of the trend. During the given period, non-commercial traders opened 12,700 long positions, whereas the number of short positions fell by 4,800. Thus, the net positions rose by 7,900. The number of long positions is 143,000 higher than the number of short positions opened by non-commercial traders. So the question now is how long will the big players increase their longs? From our point of view, this process can not continue for another 2 or 3 months. Even the net position indicator shows that we need to "unload" a bit, that is, to adjust. The overall number of short orders exceeds the number of long orders by 43,000 (684,000 vs. 641,000).

H1 chart of EUR/USD

EUR/USD is still in a high position on the one-hour chart, and is still in a total flat. Lines of the Ichimoku indicator have already merged with each other and have lost meaning so I fixed their last position and didn't change it. As you can see, they are being worked out accurately enough. We should go for the 1.0581-1.0669 horizontal channel. If EUR manages to go beyond it, then we can count on some trend movement. Or you should continue to trade on a rebound from these levels. On Thursday, the pair may trade at the following levels: 1.0340-1.0366, 1.0485, 1.0581, 1.0658-1.0669, 1.0736, 1.0806, as well as Senkou Span B (1.0589) and Kijun Sen (1.0656). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. There are still no important events scheduled for December 29 in the EU and the US. I don't expect the flat to end today. Volatility will probably remain low.

What we see on the trading charts:

Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals.

The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines.

Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals.

Yellow lines are trend lines, trend channels, and any other technical patterns.

Indicator 1 on the COT charts reflects the net position size of each category of traders.

Indicator 2 on the COT charts reflects the net position size for the non-commercial group.